Nitric oxide (NO) synthesis is a late event during differentiation of mouse embryonic stem cells (mESC) and occurs after release from serum and leukemia inhibitory factor (LIF). Here we show that after release from pluripotency, a subpopulation of mESC, kept in the naive state by 2i/LIF, expresses endothelial nitric oxide synthase (eNOS) and endogenously synthesizes NO. This eNOS/NO-positive subpopulation (ESNO+) expresses mesendodermal markers and is more efficient in the generation of cardiovascular precursors than eNOS/NO-negative cells. Mechanistically, production of endogenous NO triggers rapid Hdac2 S-nitrosylation, which reduces association of Hdac2 with the transcriptional repression factor Zeb1, allowing mesendodermal gene expression. In conclusion, our results suggest that the interaction between Zeb1, Hdac2, and eNOS is required for early mesendodermal differentiation of naive mESC.